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Sunday File And Double Dutch

The Monday Barron's was short on closed-end fund data but long on Royal Dutch Shell, a dual national share which trades no less than 4 ways in the USA. On the Big Board, we have RDS-A and RDS-B, respectively the Dutch and British versions of the share, both equal to two shares in Europe. Your broker may use something other than a period between the stock symbol and the A or B, like a / or a – or even a ().

Then we also have the one-share versions traded on the pink sheets, RYDAF (Dutch) and RYDBF (British.) If you cannot afford a round lot costing $6600 you can buy one half on the pinks—but look out for the higher spread!

Now for your question. Why are we getting all hot about acquiring yet another European oil company? The main reason is the yield, officially 5.7% on the Dutch version and 5.5% on the British. We are having problems replacing a called bond and a high-yield stock taken over both last month. I am convinced that despite (or maybe because) Pres. Trump called for the Fed to halt its rate hikes, it will do no such thing. And while these are non-US stocks the price of oil is normally denominated in Greenbucks, the currency in which they earn and we eat.

Of course, my reason doesn't explain why I am in such a rush to buy that we want to put in our order before the European markets open up. That is because of Barron's. It ran no less than 3 articles singing the praises of Shell as a turnaround candidate, one by one of my favorite writers there, Vito Racanelli who quoted several bullish analysts: Jonathan Waghorn of Guinness Atkinson Asset Management and Moustapha Mounah, of James Investment Research. The latter cited Shell's sale of some Norwegian interests in order to buy into Vito field in the Gulf of Mexico where oil can be extracted for under $35/barrel. Poor Mr. Recanelli had to insert a parenthesis saying that it is called by the same name as he is. Both say the stock is due to rise with the higher margin, by up to 25% more based on its cash flow and normal p/e ratio respective. And there is a lovely 5.7% yield while you wait. (I deliberately settled for the lower UK payout because of Dutch tax law changes.

Vivian Lewis is editor and founder of Global-Investing.com, the daily blog newsletter for Americans and others seeking to internationalize their portfolios. She brings unique experience and ...
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Vivian Lewis is editor and founder of Global-Investing.com, the daily blog newsletter for Americans and others seeking to internationalize their portfolios. She brings unique experience and competence to the business of picking foreign stocks.

After graduating from Harvard magna cum laude (and being elected to Phi Beta Kappa), Vivian lived 18 years in Europe where she worked as a financial journalist. Back in the U.S. in 1989, she decided that retail investors managing their own portfolios deserved the kind of information she had been digging up for mutual fund and pension fund managers. So she started Global Investing and later GlobalInvestingPro.

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